MPs have been awarded another pay rise today, causing outrage among some commentators.
It’s been widely reported that the politicians will get an increase of 2.7 per cent from April, while the staff who work for them will get a rise of only 1.5 per cent.
This sounds unfair and ungenerous – but it’s not quite true.
How much do MPs get?
The independent body IPSA sets MPs’ pay.
IPSA controversially gave members of the House of Commons a big one-off pay rise in 2015, arguing that their pay had slipped behind other public sector professionals and parliamentarians in other countries.
MPs saw their basic annual salary rise from £67,000 to £74,000 that year, an increase of more than 10 per cent at a time when millions of public sector workers had their salaries frozen or were given rises capped at 1 per cent.
IPSA then originally planned to link future increases to average earnings growth in the whole economy.
But they changed their minds and decided to peg MPs’ salaries to changes in public sector pay instead – a slightly less generous settlement.
That’s why MPs are getting a raise of 2.7 per cent this year – that was the year-on-year pay increase for all public sector workers recorded by the ONS when the pay deal was decided. (here – tab 1)
For comparison, workers in the private sector are currently seeing year-on-year earnings growth of 3.5 per cent (that’s the latest three-month average). The figure for the whole economy – public and private sector workers combined – is 3.4 per cent.
Note that this is an average figure, so there will certainly be many public sector workers who are getting a less generous pay rise than the people they elect to represent them.
What about their staff?
There was some outrage expressed today at the apparent difference between the 2.7 per cent rise for MPs, and an apparent rise of just 1.5 per cent for their staff. But this is an unfair comparison.
Individual MPs will see their basic pay rise by 2.7 per cent from April, but the 1.5 per cent figure isn’t the same thing: it is an increase in the total budgets made available to MPs for staffing.
MPs have considerable flexibility about the seniority of the staff they hire and where they are based, as well as some wiggle-room over pay, within boundaries set by IPSA.
An intern based in a rural constituency office could be paid as little as £13,747.50 this year, and a senior parliamentary assistant working in Westminster could get as much as £49,793.
It’s possible that a politician who hires people at the top end of the pay scale and spends all his or her staff budget on existing salaries will not be able to give staff a rise of more than 1.5 per cent this year.
But IPSA data suggests most politicians don’t max out their staff budgets and could in fact increase pay by more than that if they wanted to.
The chair of IPSA, Ruth Evans, gave evidence in parliament last month and said: “There is headroom within MPs’ budgets currently to be able to increase their staff’s pay.
“I think around 60 per cent of MPs have that headroom, and the total headroom is around 8 to 9 per cent overall in the budgets.
“If MPs felt minded to increase their staff’s salaries, that is obviously something that the vast majority can do.”
MPs got a big pay hike in 2015, at a time of widespread pay restraint.
Obviously, it’s very much a matter of opinion whether this was justified, whether the current basic salary (£79,468 from April) is fair, and whether the system for uprating their pay is a good one.
But there is a fair bit of loose talk flying around on this issue today that isn’t quite accurate.
It isn’t true that MPs are getting a bigger pay rise than the average public or private sector worker – although many people will see their earnings rise by less than average.
And it’s not right to say that MPs’ staff will inevitably get a real-terms pay cut: MPs get to decide exactly how much they pay their staff, and many will have the flexibility to hand out above-average raises.